Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Chile’s Senate is set to vote on a proposed bill establishing a 3pc ad valorem value royalty on mining copper, lithium, and all other mineral substances on Sep 1. 


The bill was approved by the Chamber of Deputies May 6. Under this bill, 25pc of the royalty will be distributed to the Regional Convergence Fund of communes within the mining regions of the country. The balance of 75pc will be used towards the repair, mitigation, or compensation of environmental damages, critical and digital infrastructure development; or research in state universities.


The Royalty bill is a result of the rising copper prices as the world recovers from the COVID-19 pandemic. During the hearings in the Chilean Senate, National Mining Society (Sonami) representatives argued the tax would drive private miners, especially those mining copper out of business.


Chile is the largest copper-producing nation in the world. According to the latest International Copper Study Group (ICSG) data copper production in Chile, however, continued to trend down due to COVID-19 protocols restricting output in the country in the early part of the year. As a result, refined copper production in Chile lagged by 7pc in January-May.

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